Quick reminder! Last week I made a few updates, including a new grading system and less fluff — which should enable me to crank out more founder pitches 😊 The below scoring system is not a validation of idea, or grading for likelihood of success. It just means, all things being equal at launch — this startup has these boxes checked.
5-star scoring is based on:
Founder — ability to lead, sell into and influence a given market.
Idea — is it inevitable or solving a BIG problem in a scaleable way.
TAM — how big is the total addressable market?
Traction — do they have meaningful early traction.
Extra help — do they have an unfair advantage, monster investor or strategics?
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Key People: Anita Brearton (2x CEO, Techstars Alum), Sheryl Schultz (Led initial investment in Crimson Hexagon which exited for $450M)
Traction: Williams-Sonoma, Capita, LogMeIn, Tyler Technologies, WGU… oh and Major League Baseball. Those are just some of the initial clients CabinetM has signed on 👀 The largest of which has a 2-year $100k contract — with typical contracts ranging from $7500-$37,000/year. The market is pretty big (roughly $2B) and growing as companies stack dozens of marketing tools and subscriptions; similar to how the managed IT space blew up over the past 5 years.
To date, CabinetM has generated nearly $500k on $1.5M in funds raised.
Terms & Takeaway
Invest in CabinetM here 👉 Term Sheet
Security Type: Reg CF
Pre-Money Valuation: $9,000,000 (10% discount)
Raised (as of publishing): $243,335
Minimum Investment: $250.00
Here's what I like: As a person that spends a lot of time on the marketing side of businesses, I can attest to the growing need for a single hub to manage all of the apps, subscriptions, tools and tech we use daily to push customers over the finish line. And, I think this problem will only get worse over time. The old days of 1 post, positioned 4 ways for Facebook, IG, Twitter and LinkedIn are WAYYYY gone.
there’s about 10 social channels now that require attention
each of these platforms are utterly different and use different tools to win
the above doesn’t even count the ad spend part of the game
Not including CRMs, Adobe, email marketing, UTMs, Google, etc.
Furthermore, companies from startup to enterprise are burning 20% of spend annually on unused subscriptions and expired tech contracts — CabinetM draws a big red circle around this and helps marketing teams (which are becoming increasingly more disconnected from HQ) better manage, implement and track performance.
Lastly, I think Anita is incredibly bright and well respected in the corporate marketing world, plus Sheryl has a massive network that should aid in getting a warm intro to decision makers (as evidenced by the early client roster).
Here's what I don't love: The price is very SaaS-y, which is to say, slightly high given the current revenue, but today’s venture climate is what it is. That said, $9M is nothing relative to the exit potential if you believe in the mission. From a business perspective, the only real glaring hesitation is… does this belong in a silo? Or a part of an existing managed IT solution? If it works you can bet all the big name IT hubs will be adding a marketing-specific unit. Now, I know CabinetM is set up to use its backend to expand beyond the M and spin off CabinetHR. And, there is a very clear case to be made that despite how logical it might sound, having marketing housed with other corporate tech tools might not actually be the greatest idea — consider the end users — engineers (left brain) vs marketing (right brain) are working together closer than ever, but still creative tools make up the majority of all marketing apps.
Going a bit sideways here, but my point is that CabinetM may be onto something brilliant, or starting a trend that swallows whole. Only time will tell.
Who should invest and why: If you work in marketing, you should understand the problem and value prop better than anyone. I will assume, like me, that means you see some promise here. If you work in IT you probably also see the potential and might even have better insight into whether traditional IT and marketing belong together or apart… Overall, the founders are very strong, early traction is great (led by many blue chip brands), margins are fantastic and the need is there.
For me, retention is the big unknown. If clients renew, they will be well-positioned to raise a formal venture round. Then, onto carving out their niche within the managed IT world… which is where the multiple will be earned.
As always, startup investing is super high risk, anything can happen.
Invest in CabinetM here 👉 Term Sheet
Questions? Text me (312) 847-4261.